Energy is about a lot more than supply: Integrating Energy Efficiency into Demand Response and Distributed Energy Systems

29 April 2020

Alan Pears AM Fellow, Climate and

Energy College University of Melbourne

Senior Industry Fellow RMIT

Important to reduce the load (use less energy) before the energy supply

system can work well!

http://www.bajiroo.com/dont-overload-a-donkey-cart-16-funny-photos

Thanks to Soren Hermansen from Samso, Denmark for the picture idea

EnergyInput

>95%Fossil Fuel

Useful<12%

Waste88%!

Opportunity to save: 88% waste in delivery of useful services!

Energy Efficiency, the International Energy Agency’s ‘first fuel’ • Potential: commercially

available, cost-effective technologies exist for energy intensity improvement rate of 3%, more than double today

• Reduces physical scale and capital costs of new energy supply and storage investment

• Enhances resilience, cuts peak energy demand

• Underpins much innovation, productivity improvement

• Delivers multiple financial, social and environmental benefits

International comparisons of countries:American Council for an Energy-Efficient Economy Energy Efficiency Scorecard

Rankings over time:YEAR AUSTRALIA2014 10/162016 16/232018 18/25

Rankings by World Economic Forum on energy transition (https://www.weforum.org/reports/fostering-effective-energy-transition-2019 ) rate Australia 43rd out of 115 countries, among the lowest of developed countries

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Australia trends in energy intensity (efficiency improvement) and renewable energy (primary energy DoEE 2019 Tables B and C -

adjusted so non-thermal electricity is equivalent to primary fossil fuel replaced (BP approach))

Energy consumption adj for BP RE Energy at 1990 intensity adj for BP RE

Energy at 2001 intensity adj for BP RE Renewables using BP Primary Approach

Renewable supply at 1989-90 level

24% saved relative to 2001intensity

32% of 2017-18 primary energy saved relative to 1990 intensity

Petajoules/year

3.4% reduced relative to 1990 intensity

Australian track record: primary energy reduction from EE and RE

RELATIVE IMPACT PJ/year in 2017-18 1990 2001EE saving from base year 2,987 2,065RE growth from base year adj to BP approach 323.7 273.8No of times larger EE/RE 9.2 7.5

Energy productivity/efficiency improvement in Australia has delivered 7 to 9 times as much reduction in primary energy use as renewable energy – and we haven’t even been trying on EE/EP!

NOTE: I use BP World Review approach: each unit of non-thermal renewable electricity is equivalent to amount of fossil fuel displaced from electricity generation (factor 3.1 to 2.9). IEA and DoEE treat each unit of non-thermal RE as 1 unit of primary energy. The IEA/DoEE approach gives EP/EE 18 to 20 times the impact of renewable energy

Trend at 1990 fixed energy intensity

Trend at 2001 fixed energy intensity

Trend at actual energy intensity

Total renewable energy with non-thermal electricity adjusted to include avoided fossil fuel electricity generation

ELECTRICITY: Risk for supply-side investorsDisruptive changes in demand and supply, need to address climate change. We must understand and manage long-term demand side issues much better

RECENT HISTORY Australian electricity forecasts have been revised down most years

Electric vehicles

Detailed data not available

From Australian Energy Market Operator Electricity Statement of Opportunities 2018

UNCERTAIN FUTURE DEMANDAnd increasing risk for investors in energy supply infrastructure

From Australian Energy Market Operator Electricity Statement of Opportunities 2019

‘High’ scenario more than 50% above ‘low’ scenario

Wholesale + network value of energy AND energy savings varies over time (minutes, hours, days, seasons and years).

Price and value are very imperfectly reflected in retail tariffs

Why does an industry that invests in assets with 30-50 year lives focus so little attention on demand trends and drivers?

Whose job is it to strategically manage long-term demand? And deliver on the National Electricity Objective of long-term benefit to consumers on demand-side?

LEDsRev cycle

a/cBuilding

https://www.aemo.com.au/-/media/Files/Electricity/NEM/Planning_and_Forecasting/SA_Advisory/2019/2019-South-Australian-Electricity-Report.pdf p.26 – source for ‘low load day’

Emerging trends of scale and timing of demand and steep ramping of dispatchable supply on hot, cold and low demand days? How do EE, DM, DR help?

Windy winter day

Rooftop PV

Scheduled load

Wind

Ramping

Off-peak HW

Heat pump HW

Wind Solar farms

Rooftop PV

Interconnector export

Low load high solar day

Thermal generators

Scheduled load

Off-peak HW Heat pump

HW

LEDsRev cycle

a/cBuilding

Appliances

Interconnector import

Source: AEMO 2018 | AEMO observations: Operational and market challenges to reliability and security in the NEM

Energy efficiency, clean energy, storage and smarts compete and complement in all stages and markets across electricity and other energy.

Mine/Harvest (EE)

Transport (EE)

Conversion (eg refine, generate electricity) (EE)

Deliver to consumer (pipeline, ship, truck, power line etc) (EE)

On-site infrastructure (eg meter, analysis, wires, pipes) (EE)

On-site energy consuming equipment

(EE)

Service delivered

STORAGE

Other inputs, eg chemicals,

water

GENERATION

Wholesale energy price – egcoal-fired electricity at 5-10c/kWh ($50-100/MWh)

Retail electricity price – 10-50

c/kWh

Consumer cost of useful service

delivered - 15c to $5+/kWh service

Fuel price – eg coal at $30/tonne= 0.11 c/MJ

or 0.4c/kWh heat EE=Energy Efficiency

‘Waste’ can be recovered, utilised

Driven by many different markets and market intermediaries with little interest in energy And

portable energy storage – egElectric Vehicles

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ACT S ACT W NT S NT W QLD S QLD W SA S SA W TAS S TAS W VIC S VIC W WA S WA W

Australian residential summer and winter peak electricity demand (MW) by activity and state at times of system peaks, 2015

(EnergyConsult 2015) Totals 21,320 MW (S) and 19,086 MW (W)

Cook Light H&C HW Apps

Energy efficiency measures can be targeted at activities that contribute to peak demand.

Note that heat from some activities can increase cooling demand and reduce heating demand.

In some states, a large proportion of space heating and cooking is supplied by gas and/or wood –switching to electricity has implications for demand profile and consumption

Targeted energy efficiency can cut peak demand

In uncertain times, incremental, modular solutions have lower risk

Why have few programs targeted the highest consumers? Retailers and network operators know who they are

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m2 NLA

Energy Intensity (MJ/m2.a)

Office buildings: energy intensity of Australian office base buildings – Area weighted average 532 MJ/m2: wide variation (p.36 Fig 5.3 Pitt&Sherry 2012)

Residential customers

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Indicative annual electricity use in a 2-3 person all-electric home – kilowatt-hours/year for major activities

2014 STOCK 2019 STOCK BEST NOW

Residential: Technology transformation to cut energy use (Based on Pears presentation to Sydney A2SE Workshop, April 2014, updated 2019, 2014 and 2019 stock energy use based on data from 2015 Residential Baseline Study Worksheets www.energyrating.gov.au )

Many households are also installing on-site and local renewable energy generation, smart management systems and storage

Building + equipment

Priorities:• Identify and replace

inefficient and old appliances and equipment with ‘best available’

• Stronger MEPS to remove poor performers from market+ stronger incentives

• Build-in smart diagnostics so equipment can alert use to emerging problems

• Build-in capacity to ‘talk’ to home management systems

• Support ongoing RD&D and supplier, sales staff training

• Identify and upgrade poor buildings, drive 8 star+ performance in new homes with focus on summer performance

Interconnection within a site, to information sources, other businesses and consumers can help to capture the ‘prizes’ firms value, and support different production and business models

This facilitates energy productivity improvement –EE/EP provides tools and mechanisms to deliver business productivity and value – the big ‘prizes’ decision-makers value

Other data sources

Informed, empowered people and good practices

Source: Transforming Energy Productivity in Manufacturing Australian Alliance for Energy Productivity (2018) p.47

Digital Transformation underpins energy/ resource efficiency and productivity

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100 kW PV systemDaily output (kWh) June ave 178 kWh, Dec ave 489 kWh.

Winter ave daily output 36.4% of Dec ave

June Dec

Integrated approach offers best outcome: * Energy efficient, flexible, smart, connected equipment and systems to provide services* Smart demand response and management* Energy storage (electric, thermal, part-processed product, gravity etc)* Energy production on-site, local* Review energy tariffs/contracts to maximise benefit from above * Trading energy, demand response and other services, Power Purchase Agreements, etc

The Sunulator (at https://renew.org.au/resources/sunulator/ is a free analysis tool for grid-connected PV evaluation. https://pvwatts.nrel.gov/ is also useful.

The fineprint – eg QueenscliffData sources weatherspark.com (24/1) www.wunderground.com(25/1) for Avalon Airport and Powercorcom.au (electricity data from Drysdale substation near Queenscliff)

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Wed 23-Sat 26 Jan 2019Drysdale sub-station electricity demand -Megawatts

Wed 23/01/2019 Thurs 24/01/2019 Fri 25/01/2019 Sat 26/01/2019

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Drysdale Powercor substation electricity Megawatts 2019

• 24/1 hot day >35C 3-7pm after overnight min of 17C –maybe some evening arrivals of holiday-makers?

• 25/1 First day of long weekend: after overnight min of 24C, very hot (45C at 1pm) with gusty wind before early afternoon change drops electricity demand to similar level to Wed and Sat. Steep increase in demand from 3pm could have many causes, eg cafes etc preparing for evening rush, cloud cutting PV output, people going home to TVs etc after weather change??

45C at 1pm

22C at 8pm

Temperature

Wind speed

Wind gusts

How to drive electricity (and energy) efficiency?• Sort out institutional responsibilities and financial arrangements, annual “EE

Statement of Opportunities”, ‘EE First’ policies, formal recognition of ‘multiple benefits’ and time-related value of EE, reshape retail energy pricing/tariffs and billing

• Reframe EE as key part of a ‘toolkit’ to help business and households to capture benefits they value with minimum cost, social and environmental impacts

• Incentivise or regulate energy retailers, network and transmission operators and generators to fund EE – based on delivered performance

• Incentivise consumers to make appropriate investments in EE• Incentivise and educate ‘market intermediaries’ (tradies, financial and tax

advisers, sales people, etc) to drive EE• Also see Energy Efficiency Council Policy Handbook and numerous International

Energy Agency reports on energy efficiency, digitalisation, multiple benefits, etc